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Archive for February, 2014

Oil addiction is very real in our world, and it holds just as true in the Unites States. In this post, we are going to talk about how much this addiction costs the U.S. and much of this is cost we may not really see in every day life. For example, we see the gas prices, but we don’t see how those prices are insulated by the government.

Did you know we pay large amounts of subsidies to oil companies, and by large I mean close to 40 billions dollars? In 1998 we subsidized over 100 billion just in relation to the auto industry, and all for the illusion that gas is cheap in the U.S. Now I am not saying every dollar in subsidy is bad as the oil and gas industry provides a significant amount of jobs in America, but we should at least be cognizant that we pay that much money for fuel that provides residual costs. Even more than that, the gas taxes we have pale in comparison to the rest of the developed world. Together, we have this idea that gas and oil is not costing very much and that cleaner fuel sources are requiring too much subsidy to work. How would we feel about gas if we had $8.00 a gallon prices?

The last point I want to make in this post are in regard to the hidden costs of oil. The two I will reference are in regard to climate and security. How much is a clean environment worth? We talked about the role that transportation emissions play in our world, and that is almost entirely from oil/gas. To quantify this thought, a study done in the UK by New Economics Foundation in 2006 found that if we attached an estimated cost of climate concerns to oil, the study attached $35/ton for carbon dioxide, that we would have a bill of 56 trillion dollars a year, just for oil. Of course, this is not necessarily completely accurate but even with a wide standard error of the estimated cost the bill is significant. A brief point on security is in relation to the cost of imported oil and where that money goes. In 2008, we spent close to 400 billion dollars importing oil, a significant amount going to OPEC and thereby funding some shaky or questionable governments and providing geopolitical power to a region that has proven to provide volatility to international politics. As I am writing this, I think we should spend more time on this subject and so in other posts we will get much more in depth on the issue of oil addiction and what is the costs. So make sure to come back and visit next week, as we will explore this further.

The “win-win approach” is referenced toward the idea that the Chinese stated in the goal for a cleaner world economy, and means that we have to find a solution that is a win for developed and developing countries. This is a issue that is crucial for the environment, because it will take the world working together to help develop a clean economy. The world’s largest emitters are comprised of both kinds of nations, and the road to finding a “win-win” is not simple.

The logic behind the argument is straight forward, and from the point of view of the developing nations, it has some reasoning. The developed nations have already gone through their primary growth cycle of economies, and while doing so, were the dominant players in carbon emissions. For example, from 1860-1990 the now developed nations were responsible for roughly three quarters of the total carbon emissions during that time period. As the developing countries are now entering their primary growth cycles, they do not want to be constrained by restrictions on energy usage due to the problems caused by the emissions released by the developed countries.

Even further, when we talk about key nations in development, China and India are at the forefront. They make up almost 3 billion people and within the coming decades, they will likely surpass 3 billion. Of that population, it is estimated that 20% is without adequate electricity supply. The amount of power required by these nations is incredible, and the poverty is also great which means that they are going to look to cheap fuel sources. The photo above provides some simple insight into why this issue is so important. The non-OECD nations have significantly more demand for energy in the coming years, and will be even more sensitive to the costs associated to powering this growth. This relationship is crucial in the search for a cleaner world. The developing and developed nations have to find common ground that will enable for a “win-win” strategy. We will explore this topic in more depth, but in the mean time, read Daniel Yergin’s thoughts on this. He is a world-renowned expert on energy politics and economics, and provides great insight into this issue.

I am taking the “to refresh” phrase and applying it to out environment, and I think it is fitting. Our natural environment is beautiful and sustainable, when left alone at least. In this post, we will not explore climate change but rather take a look only a basic concept. Have you heard of the Keeling Curve? Well, if not then we will learn it at its most basic level.

Charles Keeling was an atmospheric scientist that worked on understanding atmospheric carbon during the 1960s. The impact of the curve is that it shows how over time the carbon levels in the atmosphere has been on an increasing trend, and is projected to continue. So, pretty simply it provides the insight that regardless of what we personally think about climate change or environmental protection or anything else, we actually do have rising carbon dioxide levels. Up to date, we are just under 400 ppm (parts per million) which is up significantly from the 1960s. Take a look at the image of included and notice how much these levels have increased. Okay, so it is rising. How come?

Well, let’s first look at the U.S. and where our emissions come from. The EPA shows the breakdown of where emissions come from, and so we know where we can focus attention. Fossil fuels are a significant reason for the emissions and coal, oil, and natural gas (in that order) are the common sources used. Coal is the dominant source of electricity in the U.S., we touched on oil as the dominant source for transportation in another post, and natural gas is a rising source due to its availability and economical reasons. Natural Gas is an important source for us, because of the role it will need to play in developing a sustainable energy driven world in the future. We will touch on it in detail in another post. Interested in comparing the emissions by source?

What about emissions by country? China is now the world’s leader in emissions, with the U.S. in second followed by the EU, India and Russia. The most important thing we need to understand in our journey to clean energy and a refreshed environment is that within that list, there are both developed and developing countries. Our next post regarding the “to refresh” idea will be about this relationship between a clean environment and both developed and developing countries. Until then, I urge you to look into some of the details involved with this, perhaps look into the Kyoto Protocol and other international climate initiatives. A key obstacle in our journey to a cleaner world is this relationship between developed and developing nations and so we need to have a proper grasp of this issue.

Let’s explore the current standing of where our energy comes from. An energy mix is the mix of sources that make up a given energy supply. The goal with this post is to briefly provide an understanding of where we are currently, as well as where we appear to be headed. We know that oil drives transportation (no pun intended), but what about electricity generation? How advanced are our renewables and alternative forms of energy other than the traditional fossil fuels?

Coal is the dominant source of electricity generation not just in the U.S. but also in the world. It has been around for a long time and is abundant, as well as cheap. It makes up 40% of total electricity supply in the world, and is expected to continue to grow significantly, and according to the International Energy Administration, by 2040 coal will have increased by 73% compared to 2010. Natural Gas is the second dominant source for electricity at roughly 22% of worldwide supply. It is also expected to rise over the coming years, up to 24% by 2010. With the continuing advancement of technologies, this may prove to be an increasingly attractive source of energy for many countries. What about the other fossil fuel, the king? Petroleum. Well it is certainly not king for electricity generation as it is hardly used at all for these purposes. Globally, the electricity generated from petroleum is less than 5% and expected to decrease down to 1% within the coming decades. Petroleum is used for many processes, but is not significant for electricity and oil is almost entirely used for transportation. Nuclear is an advanced source of electricity, with 30 countries operating facilities that make up 436 reactors. Worldwide, nuclear accounts for over 12% of electricity generation. Nuclear forecasts are interesting because while there are many plants under design and construction, there is also an attitude of shying away from nuclear, especially after the disaster in Japan. The U.S. is the world leader in nuclear generated electricity, followed by France. Perhaps no country is as dedicated to nuclear as France, and this short article by Reuters helps portray the French attitude on nuclear.

Renewable energy supply is a fast growing source of electricity generation, with projections of roughly 3% growth per year through 2030, which would increase total supply from 19% to 21%. Renewables have been increasing attention and investment and due to the rise in prices of fossil fuels as well as environmental concerns, they continue to garner attention. Within the renewable category are sources such as wind, solar, biomass, biogass, geothermal, hydro-power, and other types that are less common such as tidal energy. A great source for detailed information on the breakdown of renewable energy is the National Renewable Energy Laboratory. This is the current mix, and how can we impact the future of it? What do we need to do? What is likely to happen? I ask that you pick any one of the possible sources and propose an idea or ask a question about how to deal with the issue. Throughout our journey, we will analyze many of the possible issues and ideas.

So how can clean energy lead to an altering of our economy, specifically with regard to transportation? Well, a key thing to understand is that oil currently drives (no pun intended) our transportation sector. In the US transportation accounts for 71% of our petroleum consumption and was fueled 94% by oil, and so the biggest thing to think about here is that looking at how we change our transportation requirements from oil is key.

Through the imports of oil, the US has spent more than 300 billion dollars a year, every year, and although we have begun to decrease our imports, the rising cost of oil in the future will make it so that we continue to spend an incredible amount of money on importing oil. Just for an example, the EIA forecasts that oil prices will increase significantly over the next decades with growth rates of 1.8%, and for a specific reference the price per barrel would reach $150 sometime in the 2030s. It is a good sign that we have begun to see reductions in imported oil, but we are certainly still beholden to the volatility of the oil markets. We have seen the evolution of technology designed to help reduce the need for oil, but it has not become mainstream yet. Yet, we are moving in the right direction and from bio-fuels to electric cars, we are getting closer to having another option.

Oil has been king for decades, and we are not going to be cutting off our supply in the near future. However, we can begin to alter the structure of our transportation to help remove ourselves from the “oil addiction” and this would be unbelievably beneficial from many aspects (many of which we will cover throughout our journey). From exploring the impacts of oil dependence to examining alternatives to an oil based transportation sector, we will gain a valuable understanding of what is wrong and how we can fix it. I urge you to think about some questions you may have and post them in the comment section. I would be more than happy to explore concepts that are of interest to you.

Let’s explore this meaning on Novo and why it is valuable to us. Revive what? I’m sure we could extrapolate this to many things but I am going to keep it geared toward the economy. Clean energy, and eventually sustainable energy, can not only boost the economy now but provide residual benefit. An entire research paper can discuss this issue and throughout our journey we will explore different meanings of this concept, but this post is going to look at the impact of job creation specifically. Job creation potential is huge by investing in the future of energy.

The political economy institute ran a study on energy and job creation and concluded that investment in renewable sources for instance result in roughly 3 times the job creation as would the same investment into traditional fossil fuels. The same study showed that $1 million in spending on each category (traditional fossil or clean energy) found that traditional fossil results in 5.3 jobs created compared to 16.7 jobs created for the same level of investment into clean energy! What about the potential for these jobs? Well the Global Status Report estimates that there are roughly 500,000 jobs that could be created by investment into sustainable energy, and that is just in the United States. How about some real examples of this impact? A report done by the Environmental Entrepreneurs (E2), an independent and non-partisan community that studies business and environment, references that in the first quarter of 2012 the amount of job potential from projects announced was over 40,000 nation-wide. That is over 40,000 jobs in one quarter of one year. The end result in 2012 was with a total of 110,000 jobs created, and by the end of 2013 we were looking at roughly 200,000 jobs created! Another piece of evidence for this post is with regard to the American Recovery and Reinvestment Act, specifically the energy portion (by the way, regardless of our own political affiliations the act was significant in development of clean energy). The Council of Economic Advisors looked at the energy portion of the stimulus and found that 720,000 were created through 2012 (that is some form of clean energy investment job, which while is a broad brush, is still jobs resulted from clean energy investment).

Again, this is just a small showcase of job growth and potential for it through clean energy. We will explore some more specific examples of this throughout our journey but this should at least provide some groundwork for how we can be “revived” through clean energy. If you have any questions or specifics you would to explore, please leave a comment. Also, follow me on twitter @devinxcombs, as I will include bits of exciting information there.

Why clean and not green? The reason is pretty simple, clean will precede green, and so in pursuit of the goal of 100% sustainable and renewable energy, we start with accepting cleaner energy. Green energy may mean different things to different people, but in general it means sustainable energy from renewable sources. Of course, the ultimate goal is to reach that point, but we must accept that clean solutions have to act as the gateway to green.

A change from traditional energy sources straight to green energy sources would be nearly impossible, and certainly impractical. The potential to rely solely on renewable sources is tremendous, but the process of implementing that is difficult. However, the thought process that it MUST be green otherwise it is not good enough, is far too ideological to ever make a difference. Clean allows for a gradual process of moving in the right direction. What is clean? Essentially, clean just means cleaner than before, or than a traditional alternative. This means there are levels of clean, but any step that improves from the status quo to cleaner, is a step in the right direction.

One simple example of this would be preferring to use natural gas rather than coal for electricity. Is natural gas perfect? Nope, but it is much cleaner than power from coal and is an economically practical choice as well. Green is the final destination, but clean is the road that can lead the way. We can see vast improvements in our energy requirements by implementing clean choices, while we are actively improving the capability of green energy sources. The journey to a sustainable future needs to include acceptance of cleaner energy sources so that we may actively strive to improve the current situation now, and not wait for only renewable alternatives.